SWOT

Reference: Grant, 2013

Strengths

Weaknesses

1. Increasing sales, operating income, and return on equity.

2. Increasing size boosted Wal-Mart's buying power.
3. Regular meetings.
4. Image conscious -- convert to social and environmental
responsibility.
5. Own distribution centers leads them to deliver a cheaper, faster,
and more reliable logistics. World leader in distribution logistics.
6. Strategy and management style was inseparable from the
philosophy of the founder 'thrift and value for money were a religion".
7. Buying power.
8. Involved in its suppliers employment and environmental policies
which are monitored through third-party audits.
9. Effective inventory-control system with EDI (with the present of
electronic data interchange system where suppliers can access their
system to check their inventory). Also, the RDFI which they
pioneered. This is a system for logistics management and inventory
control. These contribute to low inventory, fast replenishment.
10. Integrated value chain by IT (POS/inventory, logistics, top
management decision making). This helps achieve the goal of
responding to the needs of customers even before they get in the
store -- competitive advantage
11. Non-unionized environment which drives lower wages costs.
12. Incentive on shrinkage reduction is below the industry average.
13. Correction system leads them to being ahead of their
competitors.
14. Strong brand recognition

1. Mexico bribery scandal

2. Weakening relationship to employees and investors. This is a
conflict with what Sam Walton's leadership created relationship with
his employees that is motivational and give them a sense of
involvement .
3. Expansion compromised its ability to combine huge size with
remarkable speed and responsiveness. This is critical to its short
chain of command and close relationship between the top
management team and individual store managers.
4. Lawsuit for unpaid overtime and legally mandated breaks.

Opportunities

1. Own distribution centers leads them to deliver a cheaper, faster,

and more reliable logistics. World leader in distribution logistics.
2. Partnership with big retailers around the world.
3. Lower advertising/sales ratio compared to Target.
4. Incentive on shrinkage reduction is below the industry average.

Threats
1. 23% and 55% of its stores compete with Target and Kmart
respectively.
2. Growing geographical scope raised complex strategic and
organizational issues.
3. Unlike other global retailers (IKEA), does not have a consistent
approach to different national markets: has different strategies and
operated under different names in different countries.
4. While Wal-Mart's growth was outside of the US, its international
business was significantly less profitable than that of the US.
5. Its transformation into a multinational corporation presented a
challenge for its identity and culture that were firmly rooted in its
SW US heartland.
6. Challenges with international expansions such as difficulty in
finding the right locations for big boxes, control on merchandise
quality, e.g., in China, mislabeling ordinary pork as organic lead 12
stores in Wal-Mart so shut down for two months.